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Bull’s Eye Report: ULTA Salon, Cosmetics & Fragrance (ULTA)

ULTA stock hasn't followed its consumer discretionary peers


At, we strive to “own the best and ignore the rest” in our equity portfolios. Toward this end, each day we search our database for a “top stock” (a top rated company in terms of earnings strength as well as company and industry performance) that presents a strong technical “set up” and a good entry point.

In short, when our equity team is looking to add a stock to one of our portfolios, the “bull’s eye” stock shown below is generally their first choice.

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Company Symbol Industry Stock Rating YTD% Gain S.T.
Stop Loss
ULTA Salon Cosmetics & Fragrance Inc ULTA Specialty Stores 9.9 -3.93% $95.58

Why We Like The Stock:

ULTA Salon Cosmetics & Fragrance (NASDAQ:ULTA) is our most compelling buy today due to the fact that it is a “top-rated stock” (in terms of earnings strength and company/industry performance) in a top-3 sector, Consumer Discretionary. ULTA is currently in a long-term uptrend dating back to early 2009, and looks good in the short-, intermediate- and long-term. ULTA has pulled back from its all-time highs near $102, which represents the short-term upside of a buy at the current price. The stock has been trending higher recently, and currently sits at a good entry point.

One of the most compelling aspects of ULTA at this juncture is that it doesn’t move with the market, and hasn’t been over-extended in recent weeks like many stocks in the consumer discretionary sector have such as Lowes (NYSE:LOW), AMC Networks (NASDAQ:AMCX), Discovery Communications (NASDAQ:DISCA), Virgin Media (NASDAQ:VMED).

With a tight stop at $95.58 and immediate upside to $102, we like ULTA for a short-term trade.

We Would Be Buyers:

At the current price (~$97.60), or on a pullback to $96.

Company Profile:

Ulta Salon, Cosmetics & Fragrance is a beauty retailer, which provides one-stop shopping for prestige, mass and salon products and salon services in the United States. During the year ended Jan. 28, 2012 (fiscal 2011), the Company opened 61 new stores. It operates full-service salons in all of its stores. Its Ulta store format includes an open and modern salon area with approximately eight to 10 stations. The entire salon area is approximately 950 square feet with a concierge desk, skin treatment room, semi-private shampoo and hair color processing areas. Each salon is a full-service salon offering haircuts, hair coloring and permanent texture, with salons also providing facials and waxing.

Stock Rating: 9.9

The Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 – 10 with 10 being the highest.

ULTA: Last 3 Months

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ULTA Last 12 Months

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ULTA Last 5 Years

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At the time of publication the editor and affiliated companies own the following positions: None

Note: Positions may be bought or sold while this publication is in circulation without notice.

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